Fast is the NEW NORMAL - When Speed to Market Strategies Allow You to Stay Ahead of Competition
Why Speed is important?
With increase in competition and demand for fashionable products, Speed-To-Market has become a top management concern. Our studies show direct correlation between speed and lost sales. Lost sales could come from insufficient initial buy quantity for the 1st order and inefficient replenishment lead time for repeat orders. Different levers need to be considered to address the speed challenge. This document aims to cover practical tips for supply chain practitioners who aim to make speed a competitive advantage.
Weave apparel case studies: 2 apparel companies facing different lost sales challenges
5 major pillars should be considered when considering a Speed Model
Speed-To-Market is a strategy led from the top-down. Tailoring speed levers by product life cycle and sales velocity helps organizations prioritize their efforts. From defining the number of collections per year to developing a “mind-to-market” time and action calendar, each lever should support the distinct needs of your product segments e.g. rolling, seasonal or/and fashion items
The time from design to sample approval contributes one of the largest portions of lead time. In the apparel industry this can be as long as 100-180 days or as short as 10-20 days. Organizations should break down silos to increase cross-functional collaboration, reduce handoffs, and increase product development speed
Planning for 1st buy and reorder requires different techniques. 1st buy relies on advanced forecast planning to prevent lost sales. Reorder planning should be supported by raw material and capacity booking to ensure that you can quickly replenish successful styles
Capacity management impacts production lead time. Alignment on capacity based on standard production minutes and efficiency ratios helps align retailers and manufacturers on securing production slots. Best in class companies operate Sales & Operation planning meetings to effectively link supply and demand
There are many techniques available for retailers to shorten transportation lead times and cut warehousing cost (e.g. cross-docking through direct-to-store). Decisions of Air vs Sea shipment should be carefully evaluated in relation to projected margin gains
Next time, we will take a closer look into one of Weave’s client company on how they identified opportunities to increase speed, and establish suitable levers to improve their Speed-to-Market capability.